Five nations, which together have nearly half the world’s population, agreed Wednesday to set up a development bank that could easily rival the World Bank. If they succeed, it will mark a serious attempt by this group to redefine the values that humanity shares.
The “club” of the so-called BRICS nations – Brazil, Russia, India, China, South Africa – was started only four years ago. The new bank, which aims to loan or grant $4.5 trillion to poor countries, would be their first concrete step to challenge many of the international norms put in place after World War II, largely by the United States.
They’ve long resented the residual influence of Western countries at many other international organizations, such as the World Bank and the International Monetary Fund. Such multilateral bodies have helped create a “liberal order” for the world, promoting free markets and democratic governance in the way they provide economic assistance or agree on rules for commerce.
Most of all, that order has spread the very notion of a global system based on values and not just national interests. They also stand for the idea that values can be universal.
Setting up a separate “world bank” may represent a symbolic blow to many of those ideas and practices. India’s trade minister, Anand Sharma, said the BRICS will “have a defining influence on the global order of this century.” Together, the group accounts for about a quarter of the world economy.
In a new book, “The End of Power,” author Moisés Naím of the Carnegie Endowment for International Peace writes about how power within the geopolitical landscape is shifting from West to East and from North to South. The BRICS certainly represent that.
In the last 30 years, the world has also seen more democratic revolutions and more international interventions in sovereign countries to uphold human rights. Those trends worry Russia and China, the two BRICS members with the most money to dispense and whose leaders rule with an iron fist. Yet at the same time, the trend in attitudes worldwide reveals less tolerance for strong authority and more desire for freedom. A number of global opinion surveys back that up.
A similar attempt to challenge so-called Western values was made in the 1980s by a few nations in East Asia, such as Malaysia and Singapore. They claimed the region had a cultural bias toward communal rights and loyalty to authority. That campaign fizzled, especially when it was shown that some non-Asian countries also leaned that way.
Despite these concerns about the new bank, it should not be feared, but rather accommodated. It is, after all, helping humanity, or at least a portion of it where the BRICS want to have influence with what strings are attached to loans. The bank’s very existence plays to the idea of a free market of ideas, or a competition based on merit. And it will likely be run in a democratic way.
All that shows how much the current liberal order has become universal.
It would be too easy to divide the world into “the West and the rest.” The norms of the past half century aren’t rooted in the geography or ethnicity of Europe or the US. They have been shown to expand peace and prosperity. New global visions are welcomed if they can be just as effective.
The biggest emerging markets are uniting to tackle under-development and currency volatility with plans to set up institutions that encroach on the roles of the World Bank and International Monetary Fund.
The leaders of the so-called BRICS nations — Brazil, Russia, India, China and South Africa – are set to approve the establishment of a new development bank during an annual summit that began today in the eastern South African city of Durban, officials from all five nations say. They will also discuss pooling foreign-currency reserves to ward off balance of payments or currency crises.
“The deepest rationale for the BRICS is almost certainly the creation of new Bretton Woods-type institutions that are inclined toward the developing world,” Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory, which provides research on emerging markets, said in a phone interview. “There’s a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world.”
The BRICS nations, which have combined foreign-currency reserves of $4.4 trillion and account for 43 percent of the world’s population, are seeking greater sway in global finance to match their rising economic power. They have called for an overhaul of management of the World Bank and IMF, which were created in Bretton Woods, New Hampshire, in 1944, and oppose the practice of their respective presidents being drawn from the U.S. and Europe.
An American hedge fund has seized a ship owned by the Argentine navy from a Ghanaian port, as part of an attempt to collect on bonds purchased after Buenos Aires defaulted in 2001.
The fund, Elliott Capital Management, has been engaged in a long-running legal battle with the Argentine government. It specialises in what is euphemistically termed “distressed debt” – it buys up bonds held by countries which are extremely likely to default, or which have already defaulted. As a result, it gets them for a pittance, around one fifth of face value.
The strategy from there is to refuse to accept the default. If it does not voluntarily enter into any debt-swaps, then the company can continue to claim it is rightfully owed the full amount on the bonds. If, eventually, it gets paid, a massive profit has been earned.
This tactic has led to Elliot, and other funds which operate in a similar manner, being dubbed a “vulture fund”, profiting from dead or dying economies. The firm itself insists it only takes action against countries that can afford to pay, but choose not to.
The decade-long fight to recover the face value of the Argentine bonds has been carried out on a number of battlefields, from the US Courts to theWorld Bank (£), but the latest turn is the most nautical of them all.
The seizure, of a 100m-long tall ship staffed by 200 sailors, appears to have been planned for some time by Elliott.
The FT reports (£):
Elliott had been waiting for the ship to stop in a port where it would have a chance to enforce legal judgments previously awarded by UK and US courts. The hedge fund declined to comment. . .
US and UK courts have awarded $1.6bn in claims in [Elliott's] favour, but Argentina has taken a tough line on lingering holdouts, saying there will be no further offers.
If a US court ruling from February 23 is upheld on appeal, Argentina must pay interest to Elliott before making any payment to holders of bonds issued in the 2005 and 2010 swaps. An appeals ruling has not yet been issued.
The Libertad, which Elliott expects to be awarded ownership of, has been estimated in value at between $10m and $15m.
The vessel, a tall ship used by the Argentine Navy to train sailors and a former holder of the world speed record for a transatlantic crossing by sail, was on a graduation tour. It is free to leave the Ghanaian port of Tema if Buenos Aires posts a bond with the court, which Elliott would then also seek to recover.
In the long-run, Elliott will still rely on winning court cases to pressure the Argentine government into paying the outstanding loan in cash, rather than boats.
International land investors and biofuel producers have taken over land around the world that could feed nearly 1 billion people.
Analysis by Oxfam of several thousand land deals completed in the last decade shows that an area eight times the size of the UK has been left idle by speculators or is being used largely to grow biofuels for US or European vehicles.
In a report, published on Thursday, Oxfam says the global land rush is out of control and urges the World Bank to freeze its investments in large-scale land acquisitions to send a strong signal to global investors to stop “land grabs”.
“More than 60% of investments in agricultural land by foreign investors between 2000 and 2010 were in developing countries with serious hunger problems. But two-thirds of those investors plan to export everything they produce on the land. Nearly 60% of the deals have been to grow crops that can be used for biofuels,” says the report.
Very few, if any, of these land investments benefit local people or help to fight hunger, says Oxfam. “Instead, the land is either being left idle, as speculators wait for its value to increase … or it is predominantly used to grow crops for export, often for use as biofuels.”
The bank has tripled its support for land projects to $6bn-$8bn (£3.7bn-£5bn) a year in the last decade, but no data is available on how much goes to acquisitions, or any links between its lending and conflict.
“Why, in a world that produces more than enough food to feed everybody, do so many – one in seven of us – go hungry?” – Oxfam
Famine is spreading like wildfire throughout the horn of Africa. As 12 million people battle hunger, the UN warns that 750,000 people in Somalia face imminent death from starvation over the next four months, in the absence of outside intervention. Over the course of just 90 days, an estimated 29,000 children under the age of five died in Southern Somalia, with another 640,000 children suffering from acute malnourishment.
In the rush to find a culprit to blame for the tragedy unfolding in East Africa, the mainstream news outlets attributed the cause to record droughts, a rise in food prices, biofuel production and land grabs by foreign investors with an added emphasis on the role of the Somali terrorist group Al-Shabaab. Yet these factors alone are not responsible for the famine; instead they have intensified an already dire hunger crisis that has persisted in Sub-Saharan Africa for decades, thanks to lending policies pushed by the World Bank and International Monetary Fund (IMF) that transformed a self-sufficient, food-producing Africa into a continent dependent on imports and food aid, leaving the continent vulnerable to food emergencies and famine.
Since 1981, when these lending policies were first implemented, Oxfam found that the amount of sub-Saharan Africans surviving on less than one dollar a day doubled to 313 million by 2001, which is 46 percent of the population. Since the mid-1980s, the number of food emergencies per year on the continent has tripled.
According to Oxfam International spokesperson Caroline Pearce, the IMF and World Bank structural adjustment programs of the ’80s and ’90s led to “huge disinvestments in the agricultural sector.” Pearce concludes, “What we’re seeing now in poor agricultural systems partly relates to those kind of policies. In many cases, we’re actually calling for things to be reestablished that were dismantled under structural adjustment programs in the past.”
Yet the impoverished countries of Africa, imperiled by mass starvation, continue to pay for a “free market” agenda, and it’s costing them their lives.
From Food Abundance to Mass Starvation
Walden Bello, reporting for Foreign Policy in Focus, observes that Africa was self-sufficient in food production after declaring independence from its colonial rulers in the 1960s. Yet today, hunger and famine in Africa have “become recurrent phenomena” across the continent.
According to BBC analyst Martin Plaut, Africa was also a food net exporter between 1966 and 1970, with an average of 1.3 million tons of food exported each year. In stark contrast, almost all of today’s African countries are dependent on imports and food aid, a dramatic shift that took less than 40 years to transpire.
Which begs the question: how did an entire continent go from being a net food exporter to a net food importer, from food abundance to mass starvation, in such a short period of time?
In her book The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein details how global power players use times of crisis and chaos as a pretext for imposing destructive free-market policies that advance the interests of the wealthy. As far back as the 1970s, economists inspired by free-market guru Milton Friedman were inspiring U.S.-backed coups and military juntas to push an unpopular radical free-market agenda onto the unwilling populations of countries like Chile, Brazil and Argentina.
But Klein highlights a significant shift in strategy that took place in the mid-1980s, when economists recognized that a financial crisis “simulates the effects of a military war—spreading fear and confusion, creating refugees and causing large loss of life” — the same shock-inducing conditions that left societies ripe for disaster capitalism.
Throughout the ’60s and ’70s, Western financial institutions went on a lending spree at extremely low interest rates, mostly to developing countries that were encouraged to borrow. By the late ’70s and early ’80s, U.S. interest rates soared to levels as high as 21 percent, devastating the fragile economies of developing nations that had taken on massive debt.
Klein compares the impact of this “debt shock” to “a giant Taser gun fired from Washington, sending the developing world into convulsions.” African countries could barely afford the sky-high interest payments, let alone the actual debt and were thrown into a downward spiral of financial crises. This is where the story of Africa’s famine truly begins.
‘The Dictatorship of Debt’
The erosion of African agriculture is due in large part to policies imposed on debt-ridden African countries by the World Bank and the IMF—financial institutions set up in the aftermath of World War II with the stated aim of deterring financial crises like the ones that pushed Weimer Germany toward fascism.
The donor nations of the IMF and World Bank divvy up power within each institution based on the size of a country’s economy, allowing a handful of privileged nations, led by the U.S., to dominate decision making. As a result, Klein explains that the pro-corporatist administrations of Reagan and Thatcher in the ’70s and ’80s were “able to harness the two institutions for their own ends, rapidly increasing their power and turning them into primary vehicles for the advancement of the corporatist crusade.”
Driven by the ideology of the so-called free market, the IMF and World Bank attached conditions to desperately needed debt relief that required developing nations to implement Structural Adjustment Programs (SAPs), what Naomi Klein calls “the dictatorship of debt.”
SAPs forced governments to impose a neoliberal package of austerity, privatization and massive deregulation. For Africa, this meant cutting government subsidies to small farmers, eliminating tariffs and price controls, selling off food and grain reserves (which kept countries from starving in cases of drought or crop failure), increasing cash crop exports of raw materials to the west, and allowing foreign imports from the US and Europe to flood their markets.
Although the IMF and World Bank argued that restructuring was necessary to reduce Africa’s debt and foster economic growth, their policies produced the opposite effects: soaring debt and economic stagnation.
In a 2004 study commissioned by the Halifax Initiative, writer Asad Ismi meticulously documents the consequences of SAPs on the African continent. Between 1980 and 1993, he found a total of 566 structural adjustment programs were forced onto 70 developing countries, including 36 of Africa’s 47 Sub-Saharan nations. Since the implementation of SAPs in the 1980s, Africa’s debt soared more than 500 percent, with an estimated $229 billion worth of debt payments transferred from Sub-Saharan Africa to the west, four times the original debt owed. According to the IMF’s World Economic Outlook Database, African debt still stands at $324.7 billion, with the overwhelming majority, $278.5 billion, owed by Sub-Saharan Africa, demonstrating that SAPs have pushed Africa into perpetual debt, with no end in sight.
What does this have to do with famine? Well, perpetual debt forces governments to divert spending to debt repayment, rather than investing in basic infrastructure like healthcare and education, which is relatively non-existent in Sub-Saharan Africa. With only 10 percent of the world’s population, the Sub-Saharan region comprises 68 percent of all people living with HIV. Yet, according to Ismi, “Africa spends four times more on debt interest payments than on health care.”
The same holds true for the agricultural sector. SAPs initiated the collapse of African food security, diverting land, water and labor away from small-scale farming toward the production of cash crops, whose earnings were used to pay off debt.
Ironically, as they demanded that African states eliminate subsidies for small-scale farmers, the United States and Europe continued to provide their agricultural sectors with billions of dollars in subsidies, forcing peasant farmers to compete with an influx of cheap, subsidized commercial staples from the west—clearly a losing battle.
In 2004, Project Censored described this U.S. practice as “underselling starving nations,” a process that ensures U.S. commodities cost less than their small-scale counterparts, essentially pricing local farmers out of the market. Walden Bello points out that the World Trade Organization’s (WTO) Agreement on Agriculture cemented these lopsided policies, making developing countries the permanent dumping grounds for cheap surplus production from the global north. Thus, between 1995 and 2004, agriculture subsidies in developed countries went from $367 billion to $388 per year.
The few subsidies the IMF did permit were strictly reserved for African commercial agriculture goods for export to Europe and America. For Kenya, where a quarter of the population lives on less than a dollar a day, this meant ditching government support for subsistence farmers and diverting resources to the production of raw exports (cash crops) for the west, like tea, coffee, tobacco and cut flowers. Earnings from exports were then used to service the country’s massive debt.
After investigating the impacts of SAPs on Kenya’s struggle with malnutrition, Catherine Mezzacappa concludes, “Through their role in agricultural policy and social spending, structural adjustment policies imposed by the IMF and World Bank have contributed to the deepening of poverty and perpetuation of malnutrition in Kenya,” a country where “the leading causes of death among children are preventable and can be linked to malnutrition.”
As environmental activist Vandana Shiva put it in her book Stolen Harvest, “The hungry starve as scarce land and water are diverted to provide luxuries for rich consumers in Northern countries.”
Somalia’s Road to Famine
But for Somalia, the outcome was far worse, because the application of these neoliberal policies coincided with U.S. meddling and military intervention.
Michel Chossudovsky, author of The Globalization of Poverty, explains that despite frequent droughts, Somalia’s economy, led by small-scale farmers and pastoralists or “nomadic herdsmen,” was self-sufficient in food well into the 1970s. The pastoralists proved quite successful as livestock produced 80 percent of Somalia’s export earnings through 1983. But under SAPs, veterinarian services for livestock were privatized, making it difficult and unaffordable for herders in rural grazing areas to access animal healthcare, ultimately devastating pastoralists who made up half of the population. As for agriculture, the cheap imports of rice and wheat displaced small farmers, and resources were diverted to grow export commodities. Worst of all, “Water points and boreholes dried up due to lack of maintenance, or were privatized by local merchants and rich farmers,” due to the privatization of water resources.
The impact of structural adjustment on Somalia’s food security was compounded by American and Soviet meddling during the Cold War. Stephen Zunes, professor of politics at the University of San Francisco, explains that Somalia was initially a client state of the Soviet Union in the early ’70s until Somali dictator Said Barre switched sides following a military coup in Ethiopia that replaced the U.S.-backed Ethiopian monarchy with a Soviet-backed “Marxist-Leninist” government.
The U.S. proceeded to prop up the Barre regime with $50 million worth of weapons a year for access to strategic military bases, despite warnings that Somalia’s authoritarian leader was committing atrocious human rights violations. Eventually, repression and social unrest led to the outbreak of civil war in 1988 between rival factions, fought with weapons provided by the United States. When Barre was overthrown in 1991, he left behind a chaotic “power vacuum,” with rival factions vying for control in a country lacking any centralized structure capable of alleviating the food insecurity to come.
The neoliberal dismantling of Somalia’s agro-pastoralist economy combined with U.S.-fed sectarian violence left Somalia extremely vulnerable to famine when faced with a drought in 1992, causing the mass starvation of 300,000 people.
Fast forward to 2011, and conditions in Somalia remain relatively unchanged. Civil war continues unabated, food insecurity persists, and recurring U.S. intervention endures in the name of “fighting terror” as journalist Michelle Chen recently highlighted at Colorlines. Only this time, Somalia and its neighbors are battling this lethal combination after having spent decades living just above starvation levels.
While economic policies from the ’80s and ’90s are not solely responsible for Somalia’s current famine, Chossudovsky asserts, it’s impossible to ignore that “ten years of IMF economic medicine laid the foundations for the country’s transition towards economic dislocation and social chaos.”
In one of most outrageous episodes of neoliberal incompetence, Walden Bello described the role of structural adjustment on Malawi in the late 1990s, when subsistence farmers were provided with “starter packs” of free fertilizers and seeds. The program yielded a surplus of corn. But then the World Bank and IMF stepped in to dismantle the program and compelled the government to sell the majority of its grain reserves in order to service its debt. Bello explains the fallout:
When the crisis in food production turned into a famine in 2001-2002, there were hardly any reserves left to rush to the countryside. About 1,500 people perished. The IMF, however, was unrepentant; in fact, it suspended its disbursements on an adjustment program with the government on the grounds that “the parastatal sector will continue to pose risks to the successful implementation of the 2002/03 budget. Government interventions in the food and other agricultural markets … crowd out more productive spending.
According to Bello, when the next food crisis hit in 2005, the Malawian government gave up on the “institutionalized stupidity” of the IMF and the World Bank. Bello writes:
A new president reintroduced the fertilizer subsidy program, enabling two million households to buy fertilizer at a third of the retail price and seeds at a discount. The results: bumper harvests for two years in a row, a surplus of one million tons of maize, and the country transformed into a supplier of corn to other countries in Southern Africa.
In the 2008 World Development Report, the World Bank shocked many when it acknowledged that structural adjustment from the 1980s was a failure that “dismantled the elaborate system of public agencies that provided farmers with access to land, credit, insurance inputs, and cooperative organization.” The Bank insists the intention was to “free up the market” so the supposed more efficient and less costly private sector could take over, but “that didn’t happen,” the report admits. It goes on to confess that the beneficiaries of privatization were “commercial farmers,” which left “smallholders exposed to extensive market failures, high transaction costs and risks, and service gaps” that threatened “their survival.”
Nevertheless, when asked whether structural adjustments increased food insecurity and vulnerability to famine in Sub-Saharan Africa, a World Bank spokesperson responded with the following statement:
The famine that has now been declared in six regions of Somalia and the food insecurity that has affected other neighboring countries in the Horn of Africa is the result of climate-related hazards in a context of political instability and conflict. It would be inaccurate to blame it on structural adjustment programs implemented three decades ago.
The spokesperson added that the Bank is providing $1 billion to aid the Horn of Africa, along with increased investments toward improving agriculture in the long-term, because “This crisis is a wake-up call for the need to manage agriculture in a changing climate.”
Recognizing Economic Violence
As tragic images of starving Africans in underdeveloped countries riddled with seemingly neverending violence and conflict fill the airwaves, a narrative emerges depicting Africa as a bottomless pit of charity and aid—one that ignores the historical context essential to understanding Africa’s impoverishment.
Writing for Al Jazeera English, David Nally, the author of Human Encumbrances:Political Violence and the Great Irish Famine, concludes, “The portrayal of the passive victim enables NGOs and Western governments to assume the role of rescuer without having to ask uncomfortable questions about their own complicity in the suffering that is unfolding.”
It’s time the West faced up to the reality that this famine is the inevitable consequence of a broken food system that prioritizes the hefty pockets of the privileged above the empty stomachs of the vulnerable, draining Africa of its resources and essentially stripping Africans of their right to food and life.
David Nally quotes Susan Sontag, reminding us that, “The more it’s shown that ‘the sort of thing which happens in that place’ is partly an outcome of policies designed in this place, the more responsibility we have to do something about it. When viewing images of starving children or reading about deaths from malnutrition in the daily newspapers, we ought to consider critically the architecture of violence behind the picture or story, not merely the sad abjection of the victim.”
The World Bank chose Korean-American physician Jim Yong Kim as its next chief Monday in a decision that surprised few despite the first-ever challenge to the US lock on the Bank’s presidency.
The Bank’s directors chose Kim, a 52 year old US health expert and educator, over Nigerian Finance Minister Ngozi Okonjo-Iweala, who had argued that the huge lender needs reorientation under someone from the developing world.
Kim, 52 and currently president of the Ivy League University Dartmouth, will replace outgoing President Robert Zoellick, the former US diplomat who is departing in June at the end of his five-year term.
President Barack Obama on Friday nominated Dartmouth College president and global health expert Jim Yong Kim to lead the World Bank, an unconventional pick that could help to quell criticism in the developing world of the U.S. stranglehold on the international organization’s top post.
Obama said Kim, a Korean-born physician and pioneer in the treatment of HIV, AIDS and tuberculosis, has the breadth of experience on development issues needed to carry out the financial institution’s anti-poverty mission.
“It’s time for a development professional to lead the world’s largest development agency,” Obama said Friday morning during a Rose Garden ceremony.
The scandal over the repellent way the World Bank president is appointed has obscured an equally scandalous situation: the appointment process of the rest of the senior managers at the bank and the International Monetary Fund (IMF). They too are selected through opaque, quota-driven negotiations that are a far cry from the meritocracy these two institutions claim to value and preach to others.
When the World Bank needs a new president — and this time the Obama administration is expected to name its candidate Friday — the charade goes like this: The public is told that the selection process will be “open, transparent and merit-based.” Then, the White House announces a name — how, we do not know — and the anointed American goes through pretend job interviews with the bank’s board of directors, who pretend to make a decision about which, in fact, they have no say. The handpicked American gets the job.
The indignant denunciations of this process — that it reeks of patronage and colonialism — obscure an interesting question: Why do developing countries allow this? For that matter, why do rich countries whose citizens are not considered, such as Canada and Japan, tolerate it?
We know why Europe accepts it: The same charade is played at the IMF, starring a European — the only “acceptable” origin for the top job. In last year’s non-contest to lead the IMF, Agustin Carstens, the highly respected chief of Mexico’s central bank, barely got a nod of support from developing countries; the French candidate, Christine Lagarde, was a shoo-in (and the same nationality as her predecessor as managing director).
A new partnership to raise $1.5bn (£633m) for the world’s oceans, double marine protected areas and rebuild fish stocks was launched on Friday by the World Bank. The Global Partnership for Oceans, a coalition of governments, NGOs, scientists and businesses, is a political boost for the world’s overfished, heavily polluted and increasingly warming oceans.
Egypt’s finance minister says Cairo expects to sign a loan agreement with the International Monetary Fund for $3.2 billion next month.
The state-run al-Ahram daily of Sunday quoted Mumtaz al-Said as saying that sum would be disbursed in three stages: the first upon the deal’s signing, and the second and third three and six months later, respectively.
Egypt formally requested the loan in January, after rejecting an offer made last year. The IMF could not immediately be reached for comment.
Egypt’s economy has been badly battered by more than a year of unrest since an 18-day uprising pushed President Hosni Mubarak from power on Feb. 11, 2011.
The report said Egypt is also negotiating a second loan for $1 billion with the World Bank.
China, the world’s second-largest economy, said Thursday the next World Bank president should be selected on merit, going against a tradition that dictates the bank’s head is an American.
World Bank President Robert Zoellick said Wednesday he will step down on June 30 at the end of a five-year term, during which he led the bank’s response to the global financial crisis.
Foreign Minister spokesman Liu Weimin told a news conference that “China hopes that the World Bank will select the next president of the World Bank based on the merit principle of open and fair competition.”
A non-American president would be a break from the informal agreement that dates to the bank’s founding almost 68 years ago. The bank’s president is an American under that agreement and the head of its sister institution, the International Monetary Fund, is a European.
In announcing Zoellick’s departure, the board of the 187-nation organization said it would begin looking for a new president under guidelines directors adopted in 2011 calling for an “open, merit-based and transparent selection” process.
There is no guarantee that a non-American will be chosen to head the bank, although China and other countries with growing economic clout have been exerting pressure for a change in the U.S.-European arrangement.
The IMF was supposed to follow the same open selection guidelines when it searched for a new managing director last year. It chose a European, former French Finance Minister Christine Lagarde.
In its 1984 World Development Report, the World Bank suggests using “sterilization vans” and “camps” to facilitate its sterilization policies for the third world. The report also threatens nations who are slow in implementing the bank’s population policies with “drastic steps, less compatible with individual choice and freedom.”
The report, literally saturated with dehumanizing proposals, is devoted entirely to the World Bank’s long-term strategies in regards to population control and does not shy away from proposing the most draconian methods in order to depopulate the planet:
“Male and female sterilization and IUDs can be made more readily available through mobile facilities (such as sterilization vans in Thailand) or periodic “camps” (such as vasectomy and tubectomy-camps in India and IUD “safaris” in Indonesia).”
To illustrate how serious the World Bank is in achieving the overall strategy objectives on population control, the report makes use of outright threats:
“Population policy has a long lead time; other development policies must adapt in the meantime. Inaction today forecloses options tomorrow, in overall development strategy and in future population policy. Worst of all, inaction today could mean that more drastic steps, less compatible with individual choice and freedom, will seem necessary tomorrow to slow population growth.”
In the preface, then President of the World Bank and 1985 Bilderberg attendee, A.W. Clausen stated:
“(…) although the direct costs of The World Bank programs to reduce population growth are not large, a greater commitment by the international community is sorely needed to assist developing countries in the great challenge of slowing population growth.”
“(…) governments can use incentives and disincentives to signal their policy on family size”, the report continues. “Through incentives, society as a whole compensates those couples willing to forgo the private benefits of an additional child, helping to close the gap between private and social gains to high fertility.”
This January 26th, the water industry will privately review its newest strategy for driving public water resources into private hands at the World Economic Forum. A partnership quietly launched in October with funding from the World Bank, Coca-Cola and Veolia will report on progress towards its stated mission to “transform the water sector” by establishing “new normative approaches to water governance” that put the private sector in the driver’s seat in water management.
Calling itself the Water Resources Group (WRG) and headed by Nestlé Chairman Peter Brabeck-Letmathei, the corporation has already targeted the countries of Mexico, Jordan, India and South Africa to “shape and test governance processes” that would make water privatization more feasible and profitable. The fact that the Group has not invited publicity, and the Bank was unwilling to comment upon its launch, underscores how controversial its founders know the endeavor to be.
“The cognitive dissonance could not be clearer,” said Corporate Accountability International Executive Director Kelle Louaillier. “Amid a global water crisis, exacerbated by one failed privatization scheme after another, a development institution is aggressively advancing narrow industry interests to the detriment of poverty alleviation.”
Corporate Accountability International and its allies see the WRG as an outgrowth of longstanding Bank ideology and financing practices. For close to three decades the Bank’s corporate investment arm, the International Finance Corporation (IFC), where the Group is now housed, has sponsored the global drive to privatize water resources, attracting billions of dollars in additional financing from private banks.
This despite the fact that the World Bank reports 34 percent of such IFC-sanctioned water contracts are in distress or terminated before maturity – by far the highest rate of failure of any of the infrastructure sectors the Bank lends to. What’s more, in April the IFC’s Compliance Advisor Ombudsman reported that 40 percent of all complaints received across all IFC-financed sectors were water-related.
Still the Bank continues to act as a primary agent of water privatization. The Bank has demonstrated a long-term ideological commitment to promoting corporate control of public services and assets in the categorical belief that such privatization will lead to greater efficiency. In addition, the Bank has a more direct interest in expanding the private water market. As an equity investor in transnational water corporations, the Bank’s own profits are tied to the financial success of its private sector clients — who anticipate windfall profits from controlling water services and products. The Bank’s own financial investments in the world’s leading water privateers create a fundamental conflict of interest, giving corporate interests undue primacy in Bank decisions, and giving a self-serving aspect to its work with governments, where the same institution continues to charge hefty fees for advising and arranging deals that benefit its own portfolio of corporations.
Critics like independent urban water expert Vinay Baindur describe this new alignment between the World Bank, the government and the private sector as “a tripartite partnership to expand the stake for profits.”
For targeted nations and others to receive support from the WRG, projects must “provide for at least one partner from the private sector as part of its operations.” Such conditionalities have long been attached to Bank loans, dictating to countries an approach to water management often at odds with a basic democratic interest in guaranteeing water as a human right to all its citizens.
Corporate Accountability International identified this development shone a public spotlight on the very secretive initiative. The organization runs a campaign challenging corporate control of water, and is calling on the IFC to divest from water, including ceasing support of endeavors like the WRG.
‘The Venezuelan government has announced Venezuela’s “irrevocable” withdrawal from the World Bank affiliated arbitration body the International Centre for Settlement of Investment Disputes (ICSID).
According to an official statement released by Venezuela’s Foreign Ministry on Wednesday this week, the move has been taken on the grounds of defending national sovereignty and “to protect the right of the Venezuelan people to decide the strategic orientation of the social and economic life of the nation”.’
The leaders of the International Monetary Fund, the World Bank and the World Trade Organisation on Friday issued a warning about the economic and social risks of austerity programmes in a “call to action” designed to boost growth and fight protectionism.
The International Monetary Fund and European Union are increasing pressure on Greece to carry out its budget austerity measures if it hopes to receive more financial assistance and avoid default on its loans next month.
Nigeria is under heavy pressure from the IMF to implement further austerity measures and to create a new sovereign wealth fund from which liquidity-starved IMF member banks can extract further cash in another neo-colonial scam. Nigeria’s failure to tow the IMF line may eventually result in a collapse in their current ruling regime.
President Barack Obama is considering nominating Lawrence Summers, his former National Economic Council director, to lead the World Bank when Robert Zoellick’s term expires later this year, according to two people familiar with the matter.
Summers has expressed his interest in the job to White House officials and has backers inside the administration, including Treasury Secretary Timothy Geithner and the current NEC Director, Gene Sperling, said one of the people. Secretary of State Hillary Clinton is also being considered, along with other candidates, said the other person. Both spoke on condition of anonymity to discuss internal White House deliberations.
Venezuela will not recognize any decisions by the World Bank’s arbitration forum, President Hugo Chavez said Sunday, digging his heels in over a multibillion-dollar dispute with ExxonMobil.
“We have to get out of the ICSID,” Chavez said, referring to the International Center for Settlement of Investment Disputes. “We do not recognize any ICSID decisions at all.”
Foreign companies have filed some 20 claims worth billions of dollars with the World Bank’s arbitration tribunal in the wake of a wave of nationalizations by the Chavez government.